Many of the females spoke who had already embraced the relationship with women building a sustainable future
A growing body of research suggests that adding more women building a sustainable future to the upper echelons of the corporate world and particularly to directorial boards of publicly held companies may help better balance business’ current emphasis on short-term profit maximization towards a broader focus on longer-term goals, including positive environmental, social, and governance impact.
Research suggests that companies that explicitly place value on gender diversity perform better in general, and perform better than their peers on the multiple dimensions of corporate on women building a sustainable future.
Specifically, this paper identifies relationships between female corporate directors and corporate sustainability, and highlights why changes are important for the future of business in two main areas of focus:
1. We provide a better understanding of the relationships between female corporate directors and corporate sustainability; and
2. Our research findings build upon existing research that details the many ways women positively impact business, and ultimately, our world.
CORPORATE SUSTAINABILITY & BUSINESS:
Since the success and profitability of a business often depend on its ability to satisfy market needs for resources and services, the business is well-positioned to address all types of human needs. Shifting the focus of the business to long-term growth empowers corporate leaders to create value and sustain development over the long term. Progressive business leaders have been innovating for nearly two decades to address environmental, social, and governance issues.
The ‘business case’ for women building a sustainable future has been established through the creation of impacting social enterprises, the pronounced differentiation of brands that are more environmentally responsible and ethical, significant savings from adopting more energy-efficient practices, and the unmistakable acquisition and retention of top talent who care about their employers’ positive impact on society, to name just a few.
The report summarizes the “case” for pursuing corporate sustainability for economic growth into the following four categories:
1. Reducing costs and minimizing exposure to risks.
2. Differentiating a firm from competitors, resulting in competitive advantages.
3. Developing stronger reputations and establishing legitimacy and “license to operate.”
4. Achieving value creation.
An opportunity for female corporate directors with today’s corporations exists. With mainstream companies moving toward more efficient and sustainable business models and strategies, the potential for more women to lead is high. Women building a sustainable future have a significant opportunity to use their voice effectively to catalyze, and even lead, this evolution in business strategy.
The presence of women shapes business from the inside-out and outside-in, from the MBA training grounds to consumer to managerial levels. Though beyond the scope of this paper, numerous studies have demonstrated women have proved to be more aligned with and desirous of corporate sustainability as MBA students, employees, consumers, and investors. So the question remains: Can women at the highest echelon of business decision-making and agenda-setting influence business to be more financially, socially, and environmentally sustainable.
RESEARCHING FEMALE CORPORATE DIRECTORS & CORPORATE SUSTAINABILITY:
To fully understand the depth of impact that women can have on corporate sustainability, we investigated the corporate performance of more than 1,500 companies across three main categories: environmental, social, and governance (ESG). These three categories provide an adaptable and clear-cut framework to evaluate how and in what ways companies are progressing towards corporate sustainability and also reflect the main content areas/ways that corporate sustainability recognizes.
We used data from MSCI Inc. that evaluates industry-specific risks and opportunities facing firms across ESG issues. MSCI is the leading and only major index provider with in-house ESG research expertise since 1972. The MSCI ESG data is collected in three phases:
(1) key issues are identified by industry,
(2) risk exposure and management strategies are evaluated, and
(3) companies are rated against sector peers.
(a) In addition to analyzing risks and management strategies, we found information on the percentages and numbers of women on boards of directors for each firm. Of the companies evaluated, 68% had at least one female on their board.
(b) Environment issues captured in our data include carbon emissions, energy efficiency, water stress, biodiversity, land use, packaging materials, and waste.
(c) Similarly, key social issues examined in the data include supply chain, labor, human capital development, access to finance and healthcare, and opportunities in nutrition and health.
(d) Some examples of variables addressing governance issues include corruption and instability, ethics and fraud, anti-competitive practices, and corporate governance.
Given limited data access and sources, we were unable to conduct regressions to determine causality. Furthermore, many additional variables must be controlled for in a regression, which we were unable to collect for the entire sample. Therefore, it is important to note that our preliminary exploration highlights correlative relationships.